Energy Consumption in Assessment of Shadow Economy

Abstract

The article deals with study of the relationship between energy consumption and the level of the shadow economy. Based on the comparison of average rates of renewable energy consumption and the shadow economy per capita of EU countries and Ukraine for the period 2005–2016, the authors distinguish clusters of countries by the nature and direction of the relationship between the analyzed indices. The study of these relationships is based on the linear relationship concept between the shadow economy and energy consumption. The EU countries and Ukraine are identified as the statistical base of the study and the assessment period is 2005–2016. The results confirm the hypothesis of the shadow economic activity impact on energy consumption and prove their dependence on the scientific and technological progress in the country. All indices are statistically significant at the level of 1% and 5% and 10% respectively. This research let the authors conclude that it is necessary to take into account the energy consumption volumes in the process of estimating the shadow economy under the influence of innovative technologies and processes. Empirical calculations have proved the high level of the shadow economy in the vast majority of European Union countries, the average value of which is 22%.

Keywords

• sustainable development
• shadow economy
• energy consumption
• money laundering